Minister of Finance Yuval Steinitz's government guarantees plan will go into effect tomorrow. Sources inform ''Globes'' that Steinitz yesterday prepared to requests for the Knesset Finance Committee to provide NIS 5.2 billion in government guarantees to finance export contracts and residential construction. The sources added that committee will discuss the requests tomorrow, and will probably approve them.
In the first package, the government will provide NIS 4 billion in guarantees to insure short-term export contracts of up to one year. The guarantees will be provided through Ashra Israel Export Insurance Corp. Ltd. and Clal Credit Insurance Ltd.
Normally, foreign insurance companies provide reinsurance services, but the economic crisis and consequent increased risk has caused reinsurers to greatly reduce their activity, reducing export deals because of the lack of insurance.
Sources inform ''Globes'' that the government has already reached agreements in principle with Ashura and Clal Credit Insurance, a contract was written yesterday, and it will come into effect next week.
The government will also provide an additional NIS 1 billion in guarantees for carrying out export contracts.
Published by Globes [online], Israel business news - www.globes-online.com - on June 2, 2009
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